Jefferies cuts Amazon stock price target to $240, maintains Buy

On Tuesday, Jefferies analyst Brent Thill adjusted the price target for Amazon.com (NASDAQ:AMZN) shares, reducing it to $240 from the previous $250, while reaffirming a Buy rating for the company. According to InvestingPro data, Amazon remains a prominent player in the Broadline Retail industry, with a substantial market capitalization of $1.78 trillion. Thill’s reassessment comes in response to several challenges facing the retail giant, including macroeconomic concerns and potential tariff impacts that could affect revenue and margins.

The revised price target reflects a cautious stance due to anticipated near-term headwinds. Thill noted that Jefferies’ second-quarter and full-year 2025 revenue projections for Amazon are approximately $2 billion and $10 billion lower, respectively, than the Street’s expectations. Moreover, the firm estimates Amazon’s earnings before interest and taxes (EBIT) to be 11% and 5% below the consensus. InvestingPro analysis shows Amazon’s revenue growth at 11% over the last twelve months, with analysts forecasting 9% growth for FY2025.

Amazon faces pressures in both its third-party (3P) and first-party (1P) retail segments, as well as in its advertising business, due to the looming risks. Despite these concerns, Thill believes that Amazon Web Services (AWS), with its high-margin profile, will likely mitigate the overall margin compression for Amazon. This is supported by the company’s robust gross profit margin of 48.85% and strong return on equity of 24%, as reported by InvestingPro.

Thill’s commentary also pointed to Amazon’s stock performance, which has declined by 24% year-to-date and 31% from its peak. However, he suggests that these risks are already factored into the current stock price, which is trading near what he considers a valuation trough. According to InvestingPro analysis, Amazon appears undervalued at current levels, with 8 additional exclusive ProTips available to subscribers. Given these circumstances, Thill reiterated a Buy rating, signaling confidence in the company’s long-term prospects despite the short-term challenges it faces.

In other recent news, Amazon.com has been the focus of multiple analyst evaluations and stock rating adjustments. BofA Securities maintained a Buy rating on Amazon, setting a price target of $225, emphasizing the company’s valuation in comparison to peers like Walmart (NYSE:WMT) and Microsoft (NASDAQ:MSFT). Meanwhile, Raymond (NSE:RYMD) James downgraded Amazon from Strong Buy to Outperform, lowering the price target to $195 due to concerns over potential pressures on earnings before interest and taxes (EBIT) in the coming years. BMO Capital Markets also adjusted Amazon’s price target, reducing it to $235 while maintaining an Outperform rating, citing market conditions and demand fluctuations for Amazon Web Services (AWS). Similarly, Cantor Fitzgerald lowered its price target to $230 but kept an Overweight rating, highlighting Amazon’s potential to gain market share from physical retail during economic downturns. Despite these varied assessments, analysts across the board recognize Amazon’s strategic positioning, particularly in artificial intelligence and cloud computing, as strengths that could mitigate some challenges. BMO noted that AWS remains well-positioned to capitalize on a substantial market opportunity, despite some demand softening. Cantor Fitzgerald pointed out Amazon’s retail efficiency improvements as a factor that could positively impact future financial performance. These recent developments underscore the mixed but generally optimistic outlook analysts have on Amazon’s ability to navigate current economic conditions.

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